We are often asked by folks who want to sell their business, “When is the best time to sell?”
1. Sell at the best time for the right reasons.
The most common reason that businesses go on the market is because of owner illness or because the owner otherwise becomes unable to run the business. This is an indication that the owner likely waited too long to sell -This is NOT the best time to sell for the highest price. Sell your business when you are in a position OF NOT NEEDING TO SELL. Sell when your business is profitable and when you are wanting to pursue another opportunity, even if that opportunity is retirement.
If you are selling at a time of illness or needing to sell, work with a Broker to mask those reasons. Have your business in peak form so that weaknesses are not apparent to outside buyers. Make sure books are up to date and the physical appearance of the business is at it’s finest. Your Broker can help you my making recommendations here.
2. Be clear about what you’re selling.
You can sell your business as “an asset sale” which means that you sell the business name and assets, retaining your accounts payable (bills) and receivables (incoming cash flow invoiced up to the date of closing). OR you can choose to position the sale as a “stock or entity sale” which would transfer those as well.
In either event, you can reserve certain assets or liabilities. Be certain you and your broker take careful inventory of your options and position your package to be most attractive to a typical buyer.
3. Determine what your business is actually worth.
There are several different business valuation methods ranging from asset-based to future earnings approaches. No approach should be used exclusively. A good broker analyzes all approaches and takes into account the current market as well as what has recently sold. You should never pay an upfront fee for this – it should be a part of what your selected Business Broker does to begin the marketing process Part of the valuation also includes devising financing plans for potential buyers. Having your business SBA pre-qualified adds value and makes the business more marketable.
4. Make an assessment of the curb appeal of your business.
This includes physical appearance of your business as well as the underlying paperwork infrastructure. This is the time to google your own YELP reviews, clean up your website and other social media. Make sure your books are up to date and in order. Again, a good Business Broker will make suggestions and help you become aware of improvements and tweaks that may make the business more marketable.
You’ll also want to be sure that you’ve reduced your liabilities as much as possible, doing things such as settling any lawsuits and making sure all tax payments are up to date.
5. Get professional help when selling a business.
Selling your business is the first step to building a new business or reaching retirement. It is an even more complex transaction than selling a house and one that has even more emotional impact. A Business Broker who specializes in your type of business can help you maintain the emotional distance and objectivity you need to successfully sell your business.
We are here to help – and do not charge any consultation or evaluation fees. Call us today to begin talking about how how to get top dollar for your investment.
Beach State Brokers is a full service brokerage firm with offices in St. Augustine, FL.
We are work with local, national and international buyers who wish to match with existing businesses like yours in the North and Central Florida area.
We offer experienced brokerage – matching buyers and sellers – with the right financing packages to make the deal happen. We specialize in FOOD SERVICE BUSINESSES! We understand the financing needed for these types of businesses and work with a variety of professionals to make deals close.